CHICAGO (Dow Jones)--Traders of U.S. interest rate futures grew increasingly weary this week of establishing positions running counter to the Federal Reserve's intention of holding short-term yields near record low levels for at least another two years. Speculation intensified that rates would move up at a quicker pace after the Fed issued a slightly more upbeat view of economic conditions at its March 13 policy meeting. However, the central bank's rate outlook hadn't changed. The Fed expects the short-term federal-funds rate will remain "exceptionally" low at least through late 2014. Also, this week, Fed Chairman Ben Bernanke said policy makers should not be too quick to remove stimulative measures that are aiding the economy. Bernanke's comments "reminded people that it doesn't pay to take the other side of the trade with the central bank," said Chuck Retzky, director of futures sales at Mizuho Securities USA.
Traders Tired Of Fighting The Fed
CHICAGO (Dow Jones)--Traders of U.S. interest rate futures grew increasingly weary this week of establishing positions running counter to the Federal Reserve's intention of holding short-term yields near record low levels for at least another two years. Speculation intensified that rates would move up at a quicker pace after the Fed issued a slightly more upbeat view of economic conditions at its March 13 policy meeting. However, the central bank's rate outlook hadn't changed. The Fed expects the short-term federal-funds rate will remain "exceptionally" low at least through late 2014. Also, this week, Fed Chairman Ben Bernanke said policy makers should not be too quick to remove stimulative measures that are aiding the economy. Bernanke's comments "reminded people that it doesn't pay to take the other side of the trade with the central bank," said Chuck Retzky, director of futures sales at Mizuho Securities USA.